MacConnell v . City of Nashua CV-07-369-SM 08/14/09 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Keith MacConnell, Myquon Media, LLC, Sonic Automation, LLC and Heather McGough

v. Civil N o . 07-cv-369-JM

City of Nashua, Nashua Police Department, and Jeffrey Maher, Kerr Baxter and Dennis Linehan, in their Individual and Official Capacities

O R D E R

Plaintiffs commenced this action in state court asserting

multiple state court claims and two constitutional claims under

, based on defendants’ alleged improper arrest of

plaintiff Keith MacConnell (“MacConnell”) and subsequent search

and seizure of his property without probable cause. Defendants

removed the action to this court based on the federal questions

presented, and now move for summary judgment on the four counts

asserted by MacConnell. Plaintiff objects. After carefully

reviewing the facts and arguments before the court, defendants’

motion (document n o . 10) is granted. Discussion

1. Background Facts1

Plaintiffs are MacConnell and his girlfriend, Heather

McGough (“McGough”), who operated a business under the names of

plaintiffs Myquon Media, LLC (“Myqon”) and Sonic Automation, LLC

(“Sonic”). MacConnell sold industrial “CNC routers,” which were

used to create signs.2 He imported the routers from China and

sold them to customers throughout the United States by marketing

them over the internet and accepting purchase orders on his

website. He operated the business from a condominium located at

53 Burgundy Way in Nashua, New Hampshire, where MacConnell lived

and which McGough owned. MacConnell stored the routers in a

warehouse he referred to as the “Law Warehouse,” located at 27

1 The background facts stated here are undisputed and taken from either the exhibits to Defs.’ M . for Summ. J. (document n o . 10) or Pl.’s O b j . to Def.’s M . for Summ. J. (document n o . 1 4 ) , including the various search and arrest warrant applications, MacConnell’s March 1 4 , 2006 statement to the police, police reports of the searches, deposition testimony and affidavits.

2 CNC (an acronym for “computer-numerically controlled”) routers are “machine tools. . . used to cut, trim and shape a wide variety of materials including wood, plastic, composites, foam, honeycomb core and non-ferrous metals into either flat or three-dimensional shaped products.” See Thermwood - First in CNC Routers (2009), http://www.thermwood.com/?clid

2 Airport Road, also in Nashua.

On October 4 , 2005, a woman living in Georgia, Sherry Kown,

successfully bid for a router on Ebay, for $8,5000, plus taxes

and shipping costs, for a total of $9,265. She mailed “Keith”3 a

certified check for that amount in exchange for his promise to

deliver the router within 22 days. When the router still had not

arrived shortly before Christmas, Kown called MacConnell and was

told the router was en route. The router never did arrive, but

Kown’s check had been cashed almost immediately. MacConnell

stopped responding to Kown’s phone calls and emails, and Kown

discovered that MacConnell was no longer selling on Ebay.

In January 2006, Kown contacted Sonic, which appeared to be

involved in the router sales, and spoke to someone named “Chris,”

who assured her he would look into the problem. Kown notified

Ebay about her problem and was advised to file a complaint

against MacConnell and Sonic with the Better Business Bureau.

Ebay also separately contacted MacConnell, who explained that the

routers were being shipped from overseas and were taking longer

than normal to arrive. By January 3 1 , 2006, Kown still had not

3 Since MacConnell’s first name is Keith and he admitted to the conduct complained o f , I assume the factual references to “Keith” describe plaintiff MacConnell and hereinafter have substituted the name MacConnell for “Keith.”

3 received the router or her money back, which prompted her to file

a complaint with the Douglass County, Georgia sheriff’s office.

In early February 2006, the Douglass County Sheriff’s Department

contacted the Nashua Police Department (“NPD”) to report Kown’s

complaint.

Similarly, on November 1 7 , 2005, a man named Mansen Way, of

Indiana, ordered a router from Sonic for a total price of

$12,995. Way paid for the router with two separate checks, the

first issued on November 3 0 , 2005 for $6,000 and the second

issued on December 1 4 , 2005 for $6,995. The second check was

returned to Way with instructions from MacConnell to send it to 6

Manchester Street in Nashua, New Hampshire, which is the address

of the Law Offices of Sweeney & Sweeney, LLC, where McGough was

employed. Both checks were cashed, yet MacConnell again did not

send the router. He emailed Way that he was delayed because of

problems with shipping and issues with his internet connections

and warehouse. Way never received the router or a refund of his

money. Way reported this to the NPD on February 8 , 2006.

NPD Detective Jeffrey Maher (“Maher”), a defendant here, was

assigned to investigate both complaints. After reviewing the

written reports, Maher contacted both Kown and Way directly to

4 obtain more detailed information. Both individuals sent Maher

copies of the cancelled checks that were sent to MacConnell and

Sonic. Maher contacted the bank where the checks were deposited

and was able to confirm that MacConnell had personally deposited

the checks into two separate bank accounts. Because of Sonic’s

involvement, Maher also investigated that company. He learned

that Sonic’s website was set up in October 2005 and that the

company was formed on November 1 6 , 2005, the day before Way

placed his order. The initial registered agent was J. Leonard

Sweeney I I I , of 6 Manchester Street in Nashua, the same name and

address as the law office where McGough worked and where

MacConnell had requested Kown and Way send their checks. Sonic’s

current registered agent was MacConnell and its principal place

of business was listed as the 53 Burgundy Drive condominium.4

Maher learned that Sonic’s website had been formed by using

a server that blocks the identity of the registrant from the

domain name. The website listed its address as a post office box

in Nashua that MacConnell had used since 2003 in connection with

other businesses with which he had been associated. One of those

businesses was American Sign Supply, LLC (“American Sign”), that

4 The condominium initially was jointly owned by MacConnell and McGough and subsequently devised solely to McGough.

5 MacConnell began after having been fired from a former employer,

Hyatt Graphic Supply (“Hyatt”), for improperly using customer

funds. MacConnell also had sold routers through American Sign,

in violation of a non-compete agreement he had with Hyatt.

American Sign had a series of dissatisfied customers, one of whom

filed a complaint with the Better Business Bureau for non-

delivery of product. Sometime after Hyatt sued MacConnell for

violating the non-compete agreement, American Sign’s assets were

transferred to McGough. American Sign is now dissolved.5

Email correspondence between Way and MacConnell, Sonic, and

someone named “Chris,” revealed how MacConnell conducted his

business. On November 1 7 , 2005, the day Way purchased his

router, “Chris” told him that Sonic had only three routers in

stock. On January 1 0 , 2006, MacConnell explained that Way’s

router had been shipped inadvertently to another customer but

that Way would be the first to receive a router from the next

5 On February 2 7 , 2006, Maher contacted the New Hampshire Employment Security office to review its record of MacConnell’s reported wages. MacConnell’s last reported income was from Hyatt in the first two quarters of 2003. Since then, there were no other records of earnings or employment for MacConnell. Despite this lack of earnings, MacConnell is the registered owner of a 2000 Porsche Boxster, which Maher saw parked in the driveway at the 53 Burgundy Way condominium next to McGough’s 2004 Jeep Grand Cherokee.

6 shipment that was coming within the week. Over the next three

weeks Way tried unsuccessfully to contact MacConnell, who never

replied. After Way threatened to report MacConnell to the police

on February 7 , 2006, he was told the lack of communication had

been caused by a faulty internet connection and that the router

was in the shipping warehouse. Way never received his router.

Way provided Maher with a report prepared by a private

investigator, John Carbone, whom Way had hired to research

MacConnell’s business dealings. Carbone reported that shortly

after receiving the Kown and Way payments, on November 3 0 , 2005,

MacConnell bought a condominium in Laconia, New Hampshire with

McGough for $185,000 from J.L. and Nancy Sweeney. The report

also identified several customers who had bought routers from

plaintiffs, eleven of whom had already paid for them but not yet

received them. The nine customers in addition to Kown and Way

were from various parts of the country, and all had placed their

orders between September 3 0 , 2005 and February 1 0 , 2006. All the

customers experienced significant difficulty communicating with

plaintiffs and were told that the routers were in stock but that

the delayed receipt of their orders was caused by shipping

problems. None of the customers received the product ordered or

7 a refund of their payment.

On February 1 6 , 2006, Maher received a referral from the

National White Collar Crime Center (“NW3C”), which processes

internet fraud related complaints. A man in Israel had purchased

a CNC router from MacConnell through his other business involved

in this action, Myquon.6 On November 2 , 2005, the customer wire

transferred $9726 to the same account into which MacConnell had

deposited Kown’s check. Though MacConnell advised the customer

that it could take up to two months to receive the router,

sixteen weeks had passed without the router arriving. MacConnell

responded only once to the customer’s several attempts to inquire

about the router, explaining that an “accident” had delayed the

shipment’s arrival.

A week later, on February 2 2 , 2006, Maher was contacted by

Anthony Patrinostro, of Florida, about a CNC router he had

purchased from Sonic on February 2 but had not yet received.

Patrinostro had initially tried to pay for the router by credit

6 In the course of his investigation, Maher learned that Myquon was created in March 2005 to develop and manage online entertainment. Like Sonic, it had MacConnell as its incorporator and current registered agent, but listed J. Leonard Sweeney III of 6 Manchester Street in Nashua as the initial registered agent.

8 card, but “Chris” stated there was a problem with the transaction

and instructed him to mail a check to Sonic’s post office box

instead. Again the check was deposited into MacConnell’s bank

account but no router was received, and problems with shipping

was MacConnell’s proffered excuse.

Five more disgruntled customers contacted Maher, complaining

about the same story of buying a router from MacConnell but not

receiving the ordered router or any refund. By March 2006, Maher

concluded that MacConnell had received over $85,000 for routers,

none of which had been delivered to the customers. In total,

eleven customer reported not having received the routers they had

ordered and paid for.

Unbeknownst to Maher, on March 9, 2006, MacConnell had

placed an order for six routers from his Chinese supplier, Jinan

Xinhuiyou Zhongtai Advertising Co., LLC. The invoice reflects

that MacConnell paid a deposit of $12,870, with the balance due

upon shipment of the routers, for a total purchase price of

$29,400.

Based on his investigation, Maher determined he had probable

cause to believe MacConnell was committing Theft by Unauthorized

Taking, in violation of New Hampshire Rev. Stat. Ann. (“RSA”)

9 637:3, and Theft by Deception, in violation of RSA 637:4. Maher

sought an arrest warrant against MacConnell and filed an

affidavit in support thereof on March 1 4 , 2006. Maher also

obtained warrants to search both MacConnell’s residence at 53

Burgundy Way in Nashua and his bank accounts for evidence

relating to the charges, and filed applications in support of

those requests as well. The warrant applications were presented

to and approved by Nashua District Judge James Leary on March 1 4 ,

2006.

Later that same evening defendants executed the arrest and

search warrants. As MacConnell was driving up to the condominium

at 53 Burgundy Way, he was stopped by the police and arrested at

gunpoint, handcuffed and taken to the Nashua police station.

During the search of his home, officers found a list of customers

who had purchased routers from plaintiffs and $17,424 in cash in

a lock box. The officers also discovered what appeared to be a

rifle in a case. During his investigation, Maher learned that

MacConnell had been convicted of felony larceny in Virginia in

1989. Since it is a crime under New Hampshire law for a

convicted felon to possess a firearm, the search was stopped in

order for Maher to apply for a second search warrant to seize

10 what appeared to be a firearm. The next day, March 1 5 , 2006,

Judge Leary issued another search warrant to search for and seize

any weapons at the 53 Burgundy Way residence. Pursuant to that

warrant, officers searched MacConnell’s residence and seized a

shotgun from the closet.

After his arrest, MacConnell was interviewed by Maher and

Detective Kerry Baxter (“Baxter”), another defendant in this

action. MacConnell voluntarily waived his Miranda rights and

gave a statement to the police. MacConnell said that he never

intended to defraud anyone and explained he was just a bad

businessman. MacConnell described his difficulty capitalizing

the business and the delays the lack of funds caused, because he

could not afford to stock routers at his warehouse. He explained

that orders had not been timely filled because a shipment of

routers had been damaged. He told the police routers were stored

in the Law Warehouse.

MacConnell admitted there was no employee named Chris at

Sonic, and that it was a fictitious name he used for marketing

and sales purposes. MacConnell explained that he actually used

two pseudonyms to work the different market “platforms” for his

routers. MacConnell also admitted that representations on

11 Sonic’s website about awards and references were false. He

conceded that a photograph on the website appeared to be his

place of business but was actually a building in China that he

had cut and pasted to the site.

Maher’s investigation found that approximately 10-12 orders

were currently outstanding, totaling approximately $100,000 in

receipts. MacConnell said he had only about $500 in each of his

two bank accounts and $15,000 in cash at his home. After some

prodding by Maher, MacConnell explained that he intended to put

the cash in the bank to order more routers. MacConnell told

Maher and Baxter that the routers were worth $4,000 each and that

he had three at the Law Warehouse, but that at least one had been

damaged in shipping. MacConnell admitted that he did not have

the funds to process the 10-12 pending orders, although he had

already received payment for them. MacConnell also admitted that

the money had been spent on other business expenses and personal

living expenses.

During his interview, Maher and Baxter asked if MacConnell

would consent to a search of his car and his office at 6

Manchester Street in Nashua. After calling his attorney to

discuss the request, MacConnell consented to both searches. The

12 officers then suspended the interview after approximately 1½

hours, because MacConnell was not feeling well and needed to take

medication he had been prescribed for anxiety. MacConnell was

brought to the hospital to receive the medicine and then returned

to the police station very early in the morning of March 1 5 ,

2006.

Maher and Baxter resumed their interview with MacConnell at

4:25 a.m. They discussed the three routers MacConnell had in his

warehouse and whether they had been too damaged in shipping to be

used to fill outstanding orders. MacConnell initially said all

three routers were damaged, but then said only one was too

damaged to ship. MacConnell did not know how many orders he had

outstanding at that time. Shortly thereafter the interview

concluded.

Later that day, March 1 5 , 2006, Maher and Baxter visited the

Law Warehouse and found two of the three routers MacConnell said

were there, one of which was in a badly damaged crate but

appeared intact.7 Maher also found six bills of lading dated

from December 1 6 , 2005 to February 1 0 , 2006, which reflected

7 In fact during the interview MacConnell changed his mind about the number of routers in the warehouse, clarifying there were only two.

13 shipments of routers from the Law Warehouse to various customers.

Maher followed up with one customer, who stated they had waited

nearly six months to receive their order and had called

MacConnell every day to check on the delivery status. A second

customer told Maher they had also had to wait nearly six months

for the router to arrive, and when it did it was not what they

had wanted or ordered. That customer and a third customer both

told Maher the routers had been of an inferior quality, with

instructions and software to operate the machine in Chinese,

rendering them nearly useless.

Maher also executed the search warrant for MacConnell’s bank

records, which were sent to him on March 21 and 2 3 , 2006. Those

bank records showed that from late 2005 to early 2006 MacConnell

had made six wire transfers to his Chinese supplier, Jinan

Xinhuiyou Zhongtai, totaling $44,186. Maher concluded that these

six transfers represented partial payment for six routers which,

together with the two routers in the warehouse, were the only

orders MacConnell had processed despite having received payment

for approximately 16 routers. The bank records and the bills of

lading showed that of the 16 routers which MacConnell had sold,

only five or six had been delivered. From August 2005 through

14 February 2006, MacConnell had deposited over $207,000 into his

two bank accounts for Sonic and Myquon. The bank records also

showed that MacConnell had made withdrawals from these business

accounts to pay for personal expenses.

MacConnell was arraigned in Nashua District Court on March

1 5 , 2006, represented by counsel. MacConnell told the court he

was running a legitimate business and persuaded the court to

reduce bail from $135,000 to $75,000 cash or surety bond. He

then agreed to waive his probable cause hearing scheduled for

March 2 3 , 2006, in exchange for a further reduction of bail, to

$10,000. MacConnell’s conditions of bail included that he not

leave the State of New Hampshire, that he remain in good behavior

and that he appear in court as ordered. MacConnell also did not

have access to his office equipment, computers, business files or

money that was taken from his condominium and bank accounts.

MacConnell alleges that these conditions prevented him from doing

business, including receiving the six routers ordered from Jinan

Xinhuiyou Zhongtai reflected on the March 9, 2006 invoice.

On August 1 5 , 2006, the grand jury indicted MacConnell on

the charges brought by defendants in March. Just two weeks

later, on August 3 0 , 2006, those charges were nolle prossed on

15 condition that MacConnell refund all the payments for routers

customers had not received. On September 1 9 , 2006, MacConnell’s

property that had been seized during the March 2006 search

warrant executions was returned to him.

2. Standard of Review

Summary judgment is appropriate only “if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.” Fed. R. Civ. P.

56(c). A genuine issue is one “that properly can be resolved

only by a finder of fact because [it] may reasonably be resolved

in favor of either party.” Anderson v . Liberty Lobby, Inc.,

4 2 , 250 (1986). A material fact is one “that might affect

the outcome of the suit.” Id. at 248. In ruling on a motion for

summary judgment, the court construes the evidence and all

inferences reasonably drawn therefrom in the light most favorable

to the nonmovant. See Navarro v . Pfizer Corp.,

0 , 94

(1st Cir. 2001); Suarez v . Pueblo Int’l, Inc.,

9 , 53

(1st Cir. 2000).

The party moving for summary judgment bears the initial

16 responsibility of demonstrating the absence of a genuine issue of

material fact. Celotex Corp. v . Catrett,

1 7 , 323

(1986). Once the moving party has met its burden, the burden

shifts to the nonmovant to “produce evidence on which a

reasonable finder of fact, under the appropriate proof burden,

could base a verdict for i t ; if that party cannot produce such

evidence, the motion must be granted.” Ayala-Gerena v . Bristol

Myers-Squibb Co.,

6 , 94 (1st Cir. 1996) (citing Celotex,

and Anderson

4 9 ) . Neither

conclusory allegations, improbable inferences, nor unsupported

speculation are sufficient to defeat summary judgment. See

Carroll v . Xerox Corp.,

3 1 , 236-37 (1st Cir. 2002); see

also Price v . Canadian Airlines,

(D.N.H.

2006). Summary judgment provides the means to “pierce the

boilerplate of the pleadings” and “dispos[e] of cases in which no

trial-worthy issue exists.” Quinn v . City of Boston,

8 , 28 (1st Cir. 2003) (citing Suarez,

3 ) .

3. Analysis

Defendants move for summary judgment on the four counts

asserted just by MacConnell: counts II and III which are state

law claims of false arrest and malicious prosecution, count IV

17 which is a Fourth Amendment claim brought pursuant to § 1983, and

count VIII which is a Second Amendment claim also brought

pursuant to § 1983. MacConnell stipulates to the dismissal of

his Second Amendment claim asserted in count VIII. See Pl.’s

O b j . to Defs.’ M . for Summ. J., ¶ 5 (document n o . 1 4 ) . He also

makes no objection to defendants’ argument for summary judgment

on the claims asserted in count IV against the City of Nashua.

Accordingly, for the reasons set forth in defendants’ brief,

which are clearly sound since plaintiff has not objected to them,

the § 1983 claims against the City of Nashua are also dismissed.

MacConnell objects to defendants’ motion, arguing genuine

issues of material fact exist about whether defendants had

probable cause to arrest him, to search and seize his property,

and to continue the seizure of his liberty in the form of bail

restrictions and the seizure of his property while the

investigation was ongoing. He also contends there are issues of

material fact with respect to the state law malicious prosecution

and false arrest claims. All three of the counts at issue here

are challenges to the criminal proceedings against MacConnell.

False arrest, a form of false imprisonment, and malicious

prosecution are on the same continuum of torts that contend a

18 criminal proceeding was initiated and pursued against someone

without probable cause. See Wallace v . Kato,

8 4 , 389

(2007) (explaining the continuum of false arrest, false

imprisonment and malicious prosecution); see also Forgie-Buccioni

v . Hannaford Bros., Inc.,

(1st Cir. 2005)

(discussing New Hampshire law on same); 32 Am. Jur. 2d § 3 (Supp.

2009) (distinguishing the torts). Similarly, a claim for a

violation of the Fourth Amendment, like MacConnell asserts here,

challenges the reasonableness of a search and seizure and whether

they were done with probable cause. See Acosta v . Ames Dep’t

Stores, Inc.,

, 9 (1st Cir. 2004) (“When there is

probable cause for an arrest, the Fourth Amendment’s prohibition

against unreasonable searches and seizures is not offended.”).

Because probable cause underlies all three claims and is the

common element threading these three counts together, that

threshold issue is analyzed first.

a. Probable Cause

Probable cause for an arrest, a search, or the prosecution

of charges exists if the actor reasonably believes, based on

apparently trustworthy information, that a crime has been or is

about to be committed and the putative defendant was or is likely

19 to be a perpetrator. See

(defining probable cause in the

arrest context); see also United States v . Beckett,

6 ,

31 (1st Cir. 2003) (defining probable cause to search); Forgie-

Buccioni,

(defining probable cause under New

Hampshire law in the malicious prosecution context). Probable

cause is based on an objective standard that assesses whether

someone of ordinary caution and prudence would “believe or

entertain an honest and strong suspicion that the person arrested

is guilty.”

(internal quotation omitted); see also United

States v . McFarlane,

3 , 56 (1st Cir. 2007) (explaining

the Fourth Amendment’s objective reasonableness standard). The

focus of the probable cause inquiry is not on certitude, but

rather whether, based on the totality of the circumstances, it is

likely that criminal activity has occurred. See Acosta,

-10 (citing Illinois v . Gates,

, 232 & n.7, 235

(1983)). Although the issue of probable cause may present a

question of fact for the jury if it depends on the credibility of

conflicting evidence, once those evidentiary conflicts are

resolved, whether there was probable cause to support the

challenged action is a question of law for the court to decide.

See Forgie-Buccioni,

(citing Stock v . Byers, 120

4 4 , 846,

(1980)); see also Acosta,

-9 (citing authority).

The inquiry to determine whether there is probable cause to

support the issuance of a warrant is similar.8 “The probable-

cause standard is a practical, nontechnical conception that deals

with the factual and practical considerations of everyday life on

which reasonable and prudent men, not legal technicians, act.”

Maryland v . Pringle,

(2003). A warrant

application must be reviewed by a judicial officer, who may find

probable cause exists to issue the warrant if “given all the

circumstances set forth in the affidavit . . . there is a fair

probability that contraband or evidence of a crime will be found

in a particular place,” Gates,

3 8 , or that there is

a reasonable basis to believe the suspect committed a crime.

Samos Imex Corp. v . Nextel Commc’ns, Inc.,

0 1 , 303 (1st

Cir. 1999) (comparing the lower standard of probability required

8 The Fourth Amendment guarantees that “no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” U.S. Const. amend. IV. Accordingly, “‘[a]ny search intruding upon [an individual’s] privacy interest must be justified by probable cause and must satisfy the particularity requirement, which limits the scope and intensity of the search.’” United States v . Woodbury,

3 , 97 (1st Cir. 2007) (quoting precedent).

21 by the Fourth Amendment to the civil preponderance standard).

Only a probability or a substantial chance, not a prima facie or

actual showing, of criminal activity is needed to justify the

issuance of a warrant. See Gates,

; see also

United States v . Syphers,

6 1 , 464 (1st Cir. 2007).

Moreover, an issuing judge’s determination of probable cause is

accorded “great deference,” Gates

, and will be

upheld even “in a doubtful or marginal case.’” United States v .

McMullin,

, 6 (1st Cir. 2009) (quoting United States v .

Zayas-Diaz,

(11th Cir. 1996)).

The undisputed facts here overwhelmingly support Judge

Leary’s findings that probable cause existed both to arrest

MacConnell and to search his property. “Probable cause to obtain

an arrest warrant exists when police have knowledge of facts and

circumstances grounded in reasonably trustworthy information and

sufficient in themselves to warrant a belief by a prudent person

that an offense has been committed.” Gidley v . Oliveri, __ F.

Supp. 2d __,

(D.N.H. June 2 5 , 2009) (citing

Beck v . Ohio,

9 , 91 (1964) and Wong Sun v . United

States,

7 1 , 479 (1963)). Maher’s affidavit sets forth

in detail how MacConnell had solicited orders from at least nine

22 customers, all of whom had paid for CNC routers with checks that

MacConnell had deposited personally into his bank accounts, yet

none had received the product ordered. The investigation began

in response to complaints filed by two disgruntled customers, and

his research verified their stories. He also received a referral

from the NW3C, a national clearinghouse for internet fraud

related complaints. Maher’s work revealed a trail of shady

business practices, from the misrepresentations on Sonic’s

website and the problems MacConnell had with American Sign and

Hyatt up to the current complaints. Maher confirmed MacConnell’s

identity with surveillance photographs from the bank, New

Hampshire state driver’s license records and New Hampshire’s

Employment Security records. Finally, Maher relied on a private

investigator’s report whose independent research corroborated

Maher’s belief that MacConnell was misusing customer’s funds for

his private use rather than for legitimate business purposes.

These facts were clearly set forth in the affidavit supporting

his request for an arrest warrant and easily demonstrate, based

on the totality of the circumstances, a probability that

MacConnell was stealing his customers’ money. The arrest warrant

for the charges of Theft by Unauthorized Taking or Transfer, see

23 RSA 637:3, and for Theft by Deception, see RSA 637:4, was

certainly supported by probable cause.

Maher’s applications for warrants to search the 53 Burgundy

condominium and MacConnell’s bank accounts were similarly

supported by detailed facts that connected the suspected criminal

activity to the premises. “A warrant application must

demonstrate probable cause to believe that (1) a crime has been

committed – the “commission’ element, and (2) enumerated evidence

of the offense will be found at the place to be searched – the

so-called ‘nexus’ element.” McMullin,

(citing

precedent). In addition to repeating and expounding on the facts

set forth in the arrest warrant application, the search warrant

applications provided additional names of customers whose money

had been taken9 and explained Maher’s evidence that MacConnell

resided at 53 Burgundy Way in Nashua, that was owned by McGough,

who worked at the Sweeney law offices where the checks had been

sent. The affidavit also explained that Sonic’s principal place

of business was that address, and that both its and Myquon’s

registered agent was MacConnell, who lived there with McGough as

his roommmate. These facts substantiated Maher’s belief that

9 Maher’s affidavit indicated that over $85,000 had been collected yet not one router had been sent.

24 MacConnell was operating his fraudulent CNC router sales business

from that address and reasonably supported the probability that

some evidence of the thefts would be found there and in the bank

accounts where MacConnell had deposited checks. Judge Leary’s

finding of probable cause to search the condominium and bank

account records certainly deserves deference based on the

undisputed facts before m e .

Three more searches occurred, which also were justified

either because of probable cause or consent. During the search

of the condominium, defendants discovered what appeared to be a

rifle, which prompted Maher to file another warrant application

specifically to search for a firearm. Like the other warrant

applications, his affidavit specified in detail the reasons he

suspected MacConnell had a gun and the record evidence that made

it illegal for him to possess one.10 Again that application was

reviewed by Judge Leary, who issued the warrant after finding

10 During his investigation Maher had done a criminal records check and found that MacConnell was convicted of felony larceny in Virginia on December 1 , 1989. While MacConnell argues now that his conviction was expunged, rendering his possession of a gun legal, that evidence is irrelevant to the question of probable cause, which focuses on what Maher knew at the time he sought the warrant application. See Syphers,

(explaining the probability required for probable cause does not demand “an airtight case before taking action”).

25 probable cause to believe MacConnell may have violated RSA 159:3,

which forbids convicted felons from possessing a firearm, and

that evidence of the crime was likely to be found in the

condominium. In fact, defendants found and seized MacConnell’s

rifle. Finally, MacConnell consented to the searches of his

office and car.11 Because consent is “one of the specifically

established exceptions to the [Fourth Amendment] requirements of

both a warrant and probable cause,” Schneckloth v . Bustamonte,

1 8 , 219 (1973), and MacConnell does not allege that

defendants exceeded the scope of the consented-to searches, the

question of probable cause to support either the office or car

search was eliminated. See United States v . Turner,

4 ,

87 (1st Cir. 1999) (requiring search to be objectively reasonable

within the scope of the consent).

The undisputed record contains substantial evidence to

support Judge Leary’s findings of probable cause to issue the

arrest and search warrants that initiated the criminal

11 The record is unclear about the relationship between MacConnell’s office at the Sweeney law offices at 6 Manchester Street, which he explicitly consented to having searched, and the Law Warehouse on Airport Road, which defendants visited to confirm MacConnell had routers there, apparently with his consent but for which there is not a separate search warrant. As MacConnell has not objected to the search of the Law Warehouse, the ambiguity is immaterial to the analysis here.

26 proceedings against MacConnell. The affidavits and applications

need only show a probability or substantial chance of criminal

activity, not an actual showing of such activity. See Syphers,

; see also Acosta,

(“there is no

requirement that the officer corroborate every aspect of every

complaint with extrinsic information”). The evidence of multiple

cashed checks, of many dissatisfied current and former customers

all complaining of a similar pattern of having paid substantial

sums of money with no corresponding delivery of product, of using

deceptive pseudonyms, of misusing customer funds at Hyatt, and of

no reported income yet several expensive possessions, combined to

show facts and circumstances which reasonably created an honest

and strong suspicion that MacConnell was involved in the charged

criminal activity. See Forgie-Buccioni,

(describing the objective standard used to find probable cause);

see also McMullin,

(affirming “that police officers

can justifiably rely upon the credible complaint by a victim to

support a finding of probable cause” (internal quotation

omitted)). I find, based on the undisputed facts of before m e ,

that the warrants to arrest MacConnell and to search his property

were supported by probable cause.

27 b. MacConnell’s State Claims

Having concluded that the challenged warrants were supported

by probable cause, MacConnell’s two state claims for false arrest

and malicious prosecution can be disposed of summarily.

To be found liable on a claim for false arrest, defendants

must have unlawfully arrested MacConnell, in other words, they

must not have had probable cause to arrest him. See Forgie-

Buccioni,

(discussing false arrest under New

Hampshire l a w ) . An arrest made pursuant to a properly issued

warrant by an officer charged with the duty of enforcing it is

legal. See

(citing 1 Restatement (Second) of Torts, § 45A

(1965)); see also RSA 594:7 (2001) (providing that an officer

with a warrant for the arrest of an offender has “power to make

the arrest at any time and in any place”). Defendants had lawful

authority to arrest MacConnell in the form of the valid warrant

they had obtained from Judge Leary. See Gidley,

(dismissing false arrest and false imprisonment claims

because defendant’s warrant gave him lawful authority to

proceed). Accordingly, MacConnell has no claim for false arrest

and defendants’ motion for summary judgment on this claim is

granted. See Wallace,

(explaining that false

28 arrest claims end once process issues); see also Welch v .

Bergeron,

, 1 8 1 ,

4 1 , 343 (1975) (“An

essential element of the offense is absence of valid legal

authority for the restraint imposed.”); see also Rest. 2d Torts §

122 (arrest under a warrant is privileged if warrant is facially

valid).

To succeed on his malicious prosecution claim, MacConnell

must prove that defendants instituted the criminal proceedings

against him without probable cause and with malice, and that the

criminal proceedings terminated in his favor. See Forgie-

Buccioni,

(citing New Hampshire l a w ) ; see also

Martin v . Applied Cellular Tech., Inc.,

, 7 (1st Cir.

2002) (same). As discussed at length above, MacConnell has not

established any facts that undermine or call into question the

probable cause Judge Leary found. To the contrary, the evidence

strongly supports a finding of probable cause for the theft

charges lodged against MacConnell, which defendants honestly and

reasonably suspected based on Maher’s investigation. See Martin,

(finding probable cause to undermine plaintiff’s

malicious prosecution claim where police performed a “reasonably

thorough and independent investigation” and a state court issued

29 a warrant based on evidence).

Even if MacConnell had succeeded in casting some doubt on

the probable cause findings, his malicious prosecution claim

founders because the underlying proceedings did not terminate in

his favor. See Robinson v . Fimbel Door Co.,

4 8 , 3 5 0 ,

6 8 , 769 (1973) (holding that a nolle prossed proceeding

reached as a compromise between the plaintiff and the defendant

is not a favorable termination for purposes of establishing a

malicious prosecution claim).

By the overwhelming weight of authority, where the prior proceeding was ended by a compromise or settlement, voluntarily and understandingly consummated by the accused, there is not such a favorable termination as will support the action. . . . To show a termination in his favor, the plaintiff must prove that the court passed on the merits of the charge or claim against him under such circumstances as to show his innocence or nonliability, or show that the proceedings were terminated or abandoned at the instance of the defendant under circumstances which fairly imply the plaintiff’s innocence.

at 350-51 (citing authority). This rule is still valid. See

Paul v . Sherburne,

4 7 , 7 5 2 ,

(2006) (distinguishing facts from Robinson to explain how court’s

dismissal of stalking charges when accuser failed to appear was a

favorable termination). “The prevailing view is that if the

30 abandonment was the result of a compromise to which the accused

agreed, . . . it is not a termination in favor of the accused for

purposes of a malicious prosecution claim.” Murphy v . Lynn,

3 8 , 949 (2d Cir. 1997). It is undisputed that the charges

against MacConnell were nolle prossed on August 3 0 , 2006 in

exchange for his agreement to refund all the money he had taken.

This type of compromise is not the favorable termination required

to prove a malicious prosecution claim; therefore, defendants’

motion for summary judgment on this claim is granted.

c. Fourth Amendment Violations

MacConnell’s Fourth Amendment claims asserted in Count IV

make no more head way than his state law challenges to the

criminal proceedings. As explained supra, there was probable

cause to arrest MacConnell and search his property, rendering the

actions in March 2006 constitutional. In response to defendants’

motion for summary judgment, MacConnell rephrases his Fourth

Amendment claim to include a challenge to his continued seizure

during the five month period he was subject to bail conditions,

contending defendants were obligated to acknowledge they lacked

probable cause to pursue the prosecution once their investigation

revealed he was operating a legitimate business. This argument

31 fails for several reasons.

First, MacConnell does not allege any claim for an unlawful

seizure of himself based upon his bail conditions. Count IV is

explicitly limited to the alleged improper search and seizure

surrounding his March 1 4 , 2006, arrest. As he put i t :

Under the totality of the circumstances, it was not reasonable for the defendants to believe that they had probable cause to search M r . MacConnell’s property, seize M r . MacConnell’s property, or retain possession of M r . MacConnell’s property for the period of time during which that property was retained. Likewise, it was not reasonable for defendants to believe that they had probable cause to arrest M r . MacConnell.

Declaration, MacConnell, et a l . v . City of Nashua, et a l . , N o .

07-C-431 (Hillsborough Superior Court, Sept. 1 3 , 2007), ¶ 7 6 .

His reference to the retention of his property while the charges

were being prosecuted cannot reasonably be understood to include

a claim for unconstitutional seizure of himself during that same

five month time period.

Second, MacConnell erroneously argues he was seized on less

than probable cause because the information obtained shortly

after his arrest demonstrated he did not have the mental intent

to permanently deprive as required to support the theft charges

32 against him.12 Defendants did not have a duty to explore

exculpatory evidence or investigate potential defenses before

finding probable cause to arrest him. See Acosta,

(citing Barber v . Page,

(1968) and Baker v .

McCollan,

3 7 , 145-46 (1979)). Nor were defendants

required to investigate following their interview with MacConnell

based on the possibility that some alternative explanation may

exist for the evidence they had. See id.; see also Thompson v .

Olson,

5 2 , 556 (1st Cir. 1986) (recognizing that delay

in processing charges risks claims of false imprisonment). As

soon as MacConnell was arraigned, responsibility for the criminal

proceedings shifted to the prosecutor, over whom defendants had

no control and for whose decisions defendants cannot be held

liable. See Cignetti v . Healy,

(D.

12 Based on the undisputed record before m e , rather than yielding exculpatory information, defendants’ investigatory work substantiated the probable cause that supported Maher’s initial suspicions. During his interview the night of his arrest, MacConnell admitted he had used pseudonyms, had misrepresented his business on Sonic’s website, did not know how many orders were outstanding and could not explain where the money had gone. The search of MacConnell’s bank records showed that $82,895 had been deposited in Sonic’s bank account between December 5 , 2005 and February 2 7 , 2006, and $124,516 had been deposited in Myquon’s bank account between August 17 and December 2 1 , 2005. During this time, the records also showed that only $44,186 had been transferred to MacConnell’s Chinese supplier, leaving $163,225 at MacConnell’s disposal.

) (discussing immunity that attaches when investigative

work shifts over to prosecutorial work for judicial proceedings).

“‘[A]n affirmative duty to release arises only if the arresting

officer ascertains beyond a reasonable doubt that the suspicion

(probable cause) which forms the basis for the privilege to

arrest is unfounded.’” Thompson,

(quoting Rest.

Torts 2d, § 1 3 4 , Comment f ) . In addition to the corroborating

evidence identified above, the grand jury’s indictment on August

1 5 , 2006, clearly establishes that the probable cause to seize

MacConnell was not unfounded beyond a reasonable doubt.

Third, the two cases on which MacConnell relies to argue his

bail conditions constituted an unreasonable seizure of himself

are neither controlling nor persuasive. See Gallo v . City of

Philadelphia,

(3rd Cir. 1998); Murphy v . Lynn,

(2d Cir. 1997). In a lengthy discussion of these cases

and whether or not a claim can be made for the constitutional

tort of malicious prosecution, the First Circuit makes clear

that, if such a claim were to succeed, it would need to prove

that an unconstitutional seizure resulted from the prosecution.

See Nieves v . McSweeney,

6 , 54-57 (1st Cir. 2001)

(explaining that it is the Fourth Amendment’s protection against

34 seizure without probable cause, not prosecution without probable

cause, that would be actionable under § 1983); see also Britton

v . Maloney,

4 , 28-29 (1st Cir. 1999) (same). The court

explicitly rejected Justice Ginsburg’s reasoning in Albright v .

Oliver,

(1994), that held a person released pending

trial is still “seized” because such person “is scarcely at

liberty . . . so long as he is bound to appear in court and

answer the state’s charges,”

. See Nieves, 241 F.3d at

56 (noting that no other justice joined her opinion and following

three other circuits to reject this reasoning). Instead, the

court explained that some restrictions on liberty imposed by

pretrial conditions of bail may rise to the level of a

constitutional violation, but that ordinary requirements of

appearing in court do not pass muster. See id. at 56-57 (holding

that “the relatively benign conditions” of appearing in court are

not “the physical control and termination of freedom of movement”

that may constitute a seizure within the meaning of the Fourth

Amendment); see also Britton, 196 F.3d at 30 (same).

MacConnell argues that his restrictions were like those in

Gallo and Murphy, because he had to post bail and was prohibited

from leaving the state. While the First Circuit may acknowledge

35 that an imposition on the fundamental right to travel pending

trial, under the right circumstances, could be deemed an

unconstitutional seizure, see Nieves, 241 F.3d at 5 7 , I decline

to make such law on the facts presented here. Unlike the

plaintiffs in Gallo and Murphy, whose underlying criminal

prosecutions were initiated without probable cause and were

pursued with malice 13 , rendering the pretrial liberty deprivation

more egregious, MacConnell’s charges were based on an honest and

legitimate investigation done in response to victims’ complaints.

There was probable cause to pursue the criminal charges and they

did not end in his favor. The facts simply do not reek of

abusive governmental power or insidious investigative tactics

that can result in liberty restrictions like those that the Gallo

and Murphy courts found to be seizures in violation of the Fourth

Amendment. Such facts are not before m e .

13 In Gallo, the evidence showed that the fire marshal had altered his initial report after pressure from the insurance carrier and that governmental officials had withheld this exculpatory evidence. See id.,

. In Murphy, the evidence showed the defendant policeman had no reason to have arrested plaintiff other than perhaps a racial animus, used excessive force to effect the underlying arrest, and lied to the grand jury about the events surrounding the arrest. See

118 F.3d at 947-50. In both cases the underlying criminal proceedings terminated in plaintiff’s favor.

36 I find the facts indisputably establish that MacConnell has

no claim for unconstitutional search or seizure. Defendants’

motion for summary judgment on the Fourth Amendment claims is

granted.

Conclusion

For the reasons set forth above, defendants’ motion for

summary judgment (document n o . 10) is granted. The clerk is

ordered to enter judgment dismissing Counts I I , I I I , IV and VIII

in their entirety.

The remaining counts assert only state law claims; however,

considering the matter has progressed beyond summary judgment and

is rapidly approaching trial, I believe, based on considerations

of judicial economy, convenience and fairness to the parties,

that the better course is to continue to exercise this court’s

supplemental jurisdiction over the remaining claims pursuant to

(a). See Roche v . John Hancock Mut. Life Ins.

Co.,

(1st Cir. 1996) (discussing court’s

discretionary powers to exercise supplemental jurisdiction).

37 SO ORDERED.

James R. Muirhead United States Magistrate Judge

Date: August 1 4 , 2009

cc: Richard Lehmann, Esq. Brian J.S. Cullen, Esq.

38